19 April 2021
Five Trends for Trade and Development as We Emerge from Global Pandemic
story highlights

The five trends as we emerge from the COVID-19 pandemic are: greater investment in healthcare systems in all countries; rebuilding the resilience of micro-, small and medium-sized enterprises; a revised but different multilateralism; a quest for a greener future; and digital transformation and automation.

SDG 17 can support these five new trends through partnerships towards better health, effective multilateralism, and a greener future enabled by technology and improved resilience.

By Matthew Wilson

As the Caribbean writer V. S. Naipaul once said, “… the present, accurately seized, foretells the future.” It is imperative that the realities of today help us prepare for tomorrow.

We all know and feel the devastation of the pandemic. It has been a shared and visceral experience. By the end of 2020, COVID-19 had caused more than 1.5 million deaths and USD 28 trillion in economic losses. The most impacted have been the vulnerable: vulnerable countries, vulnerable populations, the most vulnerable within vulnerable communities. 

Earlier this year, UN Secretary-General António Guterres laid out his ten priorities for 2021. First on that list was to respond to COVID-19.

We have seen the vaccine roll out begin around the world. This gives us hope. However, the disappointment amongst the global South has been tangible as the inequalities that existed before the pandemic are being replicated in the vaccine roll out. Africa has 15% of the global population but only 1% of healthcare expenditure. Whereas some countries have stockpiled vaccines, some least developed countries (LDCs) in Africa and Asia-Pacific have not even begun a vaccination programme.

The right to health is a human right. The right to access vaccines in the midst of a pandemic should also be viewed as such. One lesson learned from the pandemic is that no country wants to be vulnerable because of a lack of an effective health care infrastructure. Therefore, the first trend going forward is greater investment in and attention to healthcare systems in all countries, but especially to medical value chains in developing countries. 

Guterres’s second priority was to start an inclusive and sustainable economic recovery. This is not an automatic process. Entrepreneurs, the gig economy, and micro-, small and medium-sized enterprises (MSMEs) have taken a massive hit. The recent Global State of Small Business Report from Facebook shows some worrying figures. Out of more than 35,000 small business leaders surveyed across 27 countries, almost a quarter reported their businesses were closed. This is consistent with the International Trade Centre’s (ITC) findings that show the smaller the firm, the stronger the negative impact of COVID-19. Hence the second trend in trade and development moving forward should be rebuilding the resilience of MSMEs.

This will take many forms, from ensuring effective access to finance to helping MSMEs move from the informal to the formal sector, and from including the priorities of MSMEs in global trade negotiations to focusing assistance provided under the Aid for Trade Initiative on bolstering the MSME ecosystems in countries. 

More importantly, we will have to rebuild confidence in entrepreneurship. MSMEs make up the backbone of our societies. They drive employment, especially for women, youth, and poor communities. They are the local providers for our global value chains. We cannot afford for them to fail. We cannot afford for young people to shy away from owning and opening their own businesses. We need to rebuild the narrative that entrepreneurship is a path to economic and inclusive growth.

The third trend should be a revised but different multilateralism. 

The messages coming from the US on trade and multilateralism are encouraging. So is the new leadership of the World Trade Organization (WTO) who wants to bridge the gap between trade rules and trade on the ground.

The pandemic has shown us both where we can succeed and where we can fail at multilateralism. Trade played a huge role in the vaccine development. The WTO recently reminded us that one of the leading COVID-19 vaccines included 280 components sourced from 19 different countries. This would not have happened if it were not for a trading system that works. 

On the other hand, the vaccine roll out has revealed where we have come up short as a global community. As the new WTO Director-General Ngozi Okonjo-Iweala stated recently, “the biggest economic stimulus for developing countries is access to COVID vaccines.” After all, effective multilateralism must work for the poorest and most vulnerable. Let us hope we remember this as the possibility of a devastating debt crisis for the global South looms on the horizon.

The newly appointed US Trade Representative Katherine Tai has promised to “prioritize rebuilding international alliances and partnerships, and re-engaging with international institutions.” US President Joe Biden has also indicated an interest in reviewing the impact that past trade policies have had on economic and racial equality. Going forward, we can expect the US to engage in a trade discourse that is more sensitive and aware of impacts on the environment, women, disadvantaged populations, and small businesses.

The fourth trend should be a quest for a greener future.

We have given up plastic straws, but discard an astounding 3 million face masks every minute. According to recent studies, we use around 129 billion face masks every month, most of them made from plastic microfibers. Much of this waste ends up in the environment.

When COVID-19 disperses, climate change will reclaim the throne as the greatest existential collective threat of the 21st century. We have to prepare for the manmade and natural effects of climate disasters ranging from increased ocean temperatures in the Caribbean and desertification in Central Africa to climate refugees in South Asia and elsewhere. In Bangladesh alone, up to 18 million people face displacement by 2050 because of rising sea levels.

We will also need to reassess the tourism industry. This has been the most vulnerable and affected sector over the course of the pandemic. Some countries, especially small island developing States (SIDS), have seen their most critical income earner, decimated. This is an opportunity to learn. We need to pay more attention to community-based and eco-tourism, and regional and local markets. We need to better integrate agriculture, hospitality, and culture into tourism. Sustainability will have to be firmly planted in tourism’s DNA moving forward.

The fifth trend is digital transformation and automation. 

Because of COVID-19, the digital transformation that would normally have taken ten years happened in one year. Yet many risk being left behind if effective policies are not developed to connect the unconnected. 

Digital technology is not just about the use of online meeting facilities and buying and selling through e-commerce. Digital technology shapes geopolitics, removes barriers to market entry, and democratizes access to information. Those MSMEs that were able to weather the pandemic are those that either already had a digital footprint or were adaptable enough to quickly create one. We need to ramp up access to digital technologies and bridge the digital divide.

Yet while digital technology connects, it can also destroy. “So-so automation,” technology that is only slightly novel enough to replace humans, but not innovative enough to create new jobs or increase productivity, warrants a closer look.

We cannot navigate the post-pandemic world alone. SDG 17 can support these five new trends through partnerships towards better health, effective multilateralism, and a greener future enabled by technology and improved resilience.

By Matthew Wilson, Chief Adviser and Chef de Cabinet, Office of the Executive Director, International Trade Centre

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